SMALL BUSINESS RESOURCES

Registering for GST

If you own a small business in New Zealand and have questions about registering for GST, read on. We’ll look at the Inland Revenue Department (IRD) requirements you need to comply with and, if necessary, how to register for GST. The current rate of the goods and services tax (GST) in New Zealand is 15%.

If you have just begun a business venture in New Zealand, you may need to register for GST and consequently include GST in the sale price of your goods or services on your tax invoices. You’ll also need to report how much GST your business both paid and received to the IRD.

When to register for GST

When do you need to register for GST in New Zealand? 

  • If you’re over the GST threshold of $60,000 per annum, or you predict to be turning over more than $60,000 per annum, you need to register for GST in New Zealand.
  • You also need to register for GST if you’re charging GST in your prices (or are required to). This includes taxi and ride share services, for example.

How to register for GST?

So how do sole traders and businesses register for GST? Registering for GST is easily done through the IRD. In many circumstances, your advisor, bookkeeper, or accountant can manage this GST registration process on your behalf as part of their services. 

If you’re not using an advisor, you can easily register your own business with the IRD without much hassle. Registering for GST online through your myIR account is the most common method. Read on for details.

How to register for GST online

So how do you register for GST online? Follow these steps:

  1. Login to your myIR account or create an account.
  2. When logged in, select ‘I want to’ then ‘more’.
  3. Select ‘register for new tax accounts’.
  4. Select your IRD number or the IRD number of the organisation you wish to register.
  5. Select ‘goods and services tax (GST)’.
  6. Input the required business and personal information (details below).
  7. You’ll receive notification of your registration and this will be displayed in your myIR account within 10 days.

What you will need to register for GST online

When registering for GST you’ll need the following information:

  • your IRD number 
  • the bank account number you will use for GST refunds
  • your business’ turnover for the previous 12 months
  • your business’ expected turnover in the next 12 months
  • your business’ BIC code – this can be found using the ‘find my BIC code tool’
  • your intended choice of filing frequency and accounting basis (either two- or six-month periods)

What to do once you are registered for GST

Now that your business is registered for GST there are a few things you’ll need to do to record taxable activity. From this point onward you should be:

  • charging GST on your goods and services
  • filing GST returns either every two or six months
  • paying any GST owing to the IRD
  • recording GST accurately 

Cloud accounting software can help manage the above processes and automate certain functions to make your life easier.

Registering for GST voluntarily

Even if you operate under the GST threshold, you may still choose to register for GST voluntarily. 

If your small business operates under the GST threshold, there are several primary reasons why you may decide to register for GST, depending on individual situations. For example:

  • You wish to simplify dealings with suppliers.
  • You wish to portray the advantageous image of a larger company that turns over more than $60,000 per annum. This can increase trust in your business.
  • You predict you’ll earn a decent GST refund as you pay more GST to suppliers than you earn through sales.

It’s prudent to consult with an accountant or advisor before registering for GST voluntarily.

For further information on registering for GST, please refer to the IRD GST guide here.